Halister News

(Bloomberg) -- Credit markets consolidating ahead of Friday’s U.S. jobs report, though corporate credit risk appetite shows no sign of capitulation, Bloomberg strategist Simon Ballard writes.

• Embedded fragility of GBP credit market clearly highlighted by recent steepening of GBP IG/HY quality curve vs EUR market that benefits from ECB’s CSPP
  • GBP IG/HY spread currently ~380bps; +60bp approx. in last month
  • EUR IG/HY spread currently ~325bps; -20bps approx in last month
• ECB bond buying should remain strong structural pillar of support for EUR corporate bonds/credit spreads; window of opportunity for investors/issuers to get deals done now before market potentially slows down for summer by end of this month through Aug.
• Risk Appetite Model highlights balance between risk demand and fragile sentiment
• CDX IG closed -0.1bps at 81.44 in overnight session; iTraxx Asia Ex Japan IG currently +0.8bps at 138.02

NEWS

• Corporate News
• Hutchison, VimpelCom Said in Exclusive Wireless Talks With Iliad
• Persimmon Says Trading in 1H Was Strong, Revenue Increased 12%
• Young & Co Says 1Q LFL Managed House Revenues Up 4.1%
• Beer Drinkers in Thailand Power Singapore’s Best Stock in 2016

• Financial News
• London Banker Bonuses Set to Shrivel as Brexit Hits Dealmaking
• Credit Suisse’s Naqvi Named Sole Markets Head for Asia Pacific
• UBS Says Received Disclosure Order From Swiss Tax Administration

• Credit Rating News
• S&PGR Revises Cheung Kong Property Otlk To Pos; Afrms ’A-’ Rtg
• Fitch Affirms Sino-Ocean Group at ’BBB-’; Outlook Stable
• Fitch Affirms BNZ’s Mortgage Covered Bonds at ’AAA’/Stable

• Other News
• Brexit Hobbles Japan Inc. as Rising Yen Damps Profit Outlook
• Brexit Crisis Seen Forcing Sweden to Keep Negative Rates Longer
• Sensex Forward EPS Regains Year-Start Level Helped by IT, Auto

ANALYST VIEWS

• The ECB reported that the first three weeks of the corporate bond purchase programme has seen it lift €6.8b of the market...a monthly run rate of around €9b... corporate bond risk that will not re-emerge: creditmarketdaily.com

NEW ISSUES

• ASML Holding EU500m 6Y MS +75, EU1b 10Y MS +115
• State of Berlin EU600m 0.25% 4/2025 Tap MS -7
• BNG EU350m 1.375% 10/2030 Tap MS +5
• Commerzbank EU750m 8Y Covered MS -4
• Muenchener Hypo EU250m 0.5% 4/2026 Covered Tap MS -8
• European IG credit pipeline here and HY credit pipeline here
• Issuers exposed to S-T rollover and interest-rate reset risk here

• NOTE: Simon Ballard is a credit strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.